ACIT, New Delhi V. M/s. Vipul Infracon (P) Ltd., New Delhi

ITA 965/DEL/2012

• Counselvise Citation: 96520114 RSA 2012
• Duration Of Justice: 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 04-09-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 27-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY KR JAIN
• Assessee Lawyers: RAJESH ARORA
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: H NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI A.N.PAHUJA, ACCOUNTANT MEMBER I.T.A .NO-965/DEL./2012 ASSESSMENT YEAR -2007-08 ACIT, VS VIPUL INFRACON (P) LTD., CENTRAL CIRCLE-2, ROOM NO.-323, 9-A, 3 RD FLOOR, VASANT SQUARE MALL, 3 RD FLOOR, ARA CENTRE, SECTOR-B, POCKET-5, VASANT KUNJ, JHANDEWALAN EXTN., NEW DELHI. NEW DELHI. PAN-AAACT4544M (APPELLANT) (RESPONDENT) APPELLANT BY: SH. SANJAY KR. JAIN, SR. DR RESPONDENT BY: SH. RAJESH ARORA, CA DATE OF HEARING:-04.09.2012 DATE OF PRONOUNCEMENT:-19.10.2012 ORDER PER RAJPAL YADAV, JM THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDE R OF LD. CIT(A)-III, DELHI DATED 07.12.2011 PASSED FOR AY 2007-08. 2. THE SOLITARY GRIEVANCE OF THE REVENUE IS THAT LD . CIT(A) HAS ERRED IN DELETING RS.10,48,340/- BY ENTERTAINING THE ADDITIONAL EVIDE NCE IN VIOLATION OF RULE 46A OF THE INCOME TAX ACT RULES, 1962. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAS FILED ITS RETURN OF INCOME ON 31.10.2007 DECLARING NIL INCOME. THE CASE OF TH E ASSESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT AND A NOTICE U/S 143(2)/142(1) WERE ISSUED ON 16.09.2009. ON SCRUTINY OF THE ACCOUNTS, IT REVEALED TO THE AO THA T ASSESSEE COMPANY HAS SHOWN I.T.A .NO-965/DEL./2012 2 TOTAL INCOME FROM THE REAL ESTATE ACTIVITIES AT RS. 9,13,57,538/-. THE ASSESSEE HAD CARRIED OUT CONSTRUCTION ON THREE PROJECTS DURING T HE YEAR NAMELY TECH SQUARE, TRADE CENTRE AND KOLKATTA PROJECT. IT HAS SHOWN OTHER EX PENSES OF RS. 7,15,92,454/- WHICH INCLUDE EXPENDITURE ON BROKERAGE OF RS.1,71,96,561/ -. THE LD. AO DIRECTED THE ASSESSEE TO FILE CONFIRMATION FROM THE PARTIES TO W HOM BROKERAGE WAS PAID. THE ASSESSEE HAS FILED CONFIRMATION IN RESPECT OF MOST OF THE PARTIES, BUT WAS NOT IN A POSITION TO PRODUCE CONFIRMATION IN RESPECT OF THE FOLLOWING PARTIES:- S.NO. NAME OF THE BROKER AMOUNT IN RS. 1. CHAUDHARY NARESH & CO. 1,24,515/- 2. GLOBAL AVENUES 1,23,464/- 3. HARMONY ESTATES AND DEVELOPERS 1,74,060/- 4. SAHNI & ASSOCIATES 6,26,301/- THE LD. AO DISALLOWED THE CLAIM OF THE ASSESSEE WIT H RESPECT TO THIS AMOUNT AND MADE AN ADDITION OF RS.10,48,340/-. 4. DISSATISFIED WITH THE ADDITION, THE ASSESSEE FIL ED AN APPEAL BEFORE THE LD. CIT(A). IT MOVED AN APPLICATION UNDER RULE 46A OF THE INCOME TAX RULES, 1962 FOR LEADING ADDITIONAL EVIDENCE. IN THE ADDITIONAL EVI DENCE, ASSESSEE HAS FILED CONFIRMATION AND ALL OTHER RELEVANT DOCUMENTS FOR E XPLAINING THE GENUINENESS OF BROKERAGE PAID BY IT. THE LD. FIRST APPELLATE AUTH ORITY HAS INVITED THE COMMENTS OF AO FOR ADMISSION OF ADDITION EVIDENCE AS WELL AS ON MERITS OF THE EVIDENCE. 5. THE LD. AO FILED A DETAILED OBJECTION FOR THE AD MISSION OF ADDITIONAL EVIDENCE HOWEVER ON MERITS; HE AGREED THAT IT IS A REVENUE E XPENDITURE WHICH DESERVES TO BE ALLOWED. LD. FIRST APPELLATE AUTHORITY HAS REPRODU CED THE REMAND REPORT SUBMITTED I.T.A .NO-965/DEL./2012 3 BY THE AO IN PARAGRAPH 4.3 ON PAGE NOS. 15-19 OF TH E IMPUGNED ORDER. LD. CIT(A) THEREAFTER, ENTERTAINED THE ADDITIONAL EVIDENCE AND DELETED THE ADDITION. THE FINDING RECORDED BY THE LD. FIRST APPELLATE AUTHORITY FOR A DMISSION OF ADDITIONAL EVIDENCE IS WORTH TO NOTE. IT READS AS UNDER :- IN THE REMAND REPORT THE AO HAS TAKEN OBJECTION TO ADMITTANCE OF ADDITIONAL EVIDENCE, ON THE GROUND THAT THE ASSESSE E DID NOT FURNISH THE CONFIRMATION INSPITE OF REPEATED OPPORTUNITIES. I HAVE CONSIDERED THE OBJECTION OF THE AO BUT AM OF THE VIEW THAT IN THE FACTS OF THE CASE AND CONSIDERING THAT THE PARTIES TO WHOM THE BROKERAGE IS PAID MAY NOT BE EASILY ACCESSIBLE AFTER A TIME GAP IT IS A REAL POS SIBILITY THAT THE ASSESSEE IS PREVENTED FROM FILING THE CONFIRMATION AS CALLED FOR BY THE AO, INSPITE OF HIS BEST EFFORTS. THEREFORE, IT IS IN THE INTER EST OF JUSTICE THAT A CONFIRMATION NOW FILED DURING THE APPELLATE PROCEED ING SHOULD BE ADMITTED IN THE FACTS OF THE CASE AS IN MY VIEW THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EV IDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE AO. 6. WITH THE ASSISTANCE OF LD. REPRESENTATIVE, WE HA VE GONE THROUGH THE RECORD CAREFULLY. AS FAR AS THE ALLOWANCE OF THE DEDUCTIO N OF BROKERAGE EXPENSES ON MERIT ARE CONCERNED, LD. AO DID NOT RAISE SERIOUS DISPUTE , RATHER HE ACCEPTED THE CLAIM OF DEDUCTION. IT IS DISCERNIBLE FROM THE REMAND REPOR T EXTRACTED BY LD. CIT(A) ON PAGE 19 OF THE ORDER. NOW, THE ONLY DISPUTE REMAINED BE FORE US IS WHETHER LD. CIT(A) HAS RIGHTLY ENTERTAINED THE ADDITIONAL EVIDENCE OR NOT? ON PERUSAL OF THE RECORD, WE FIND THAT AO HAS ISSUED NOTICE U/S 143(2) ON 16.09. 2009. HE COMPLETED THE ASSESSMENT ON 21.12.2009, MEANING THEREBY THE PROCE EDING WAS ALIVE ONLY FOR A I.T.A .NO-965/DEL./2012 4 PERIOD OF THREE MONTHS. THE ASSESSEE HAS SUBMITTED BEFORE THE AO THAT PARTIES MAY NOT BE EASILY ACCESSIBLE AFTER A TIME GAP. WITH ON E PARTY, IT HAD DEALT WITH ONLY ONCE. LD. FIRST APPELLATE AUTHORITY TAKING INTO CONSIDERA TION THIS ASPECT OBSERVED THAT ASSESSEE WAS PREVENTED BY SUFFICIENT REASONS FOR NO T PRODUCING THE EVIDENCE. HENCE, ITS CASE FALLS WITHIN THE AMBIT OF RULE I OF RULE 4 6A. CONSIDERING THE FINDING OF LD. CIT(A), WE DO NOT SEE ANY REASON TO INTERFERE IN TH E ORDER OF LD. CIT(A). LD. FIRST APPELLATE AUTHORITY HAS RIGHTLY ENTERTAINED THE ADD ITION EVIDENCE AND THEREAFTER RIGHTLY DELETED THE ADDITION. 7. THE APPEAL OF THE REVENUE IS DEVOID OF ANY MERIT . ACCORDINGLY, IT IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19.10.2012. SD/- SD/- (A.N.PAHUJA) (RAJPAL YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 19/10/2012 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI